Ripple, a provider of leading enterprise blockchain solutions for global
payments, has agreed to enter into a strategic partnership with
MoneyGram (NASDAQ: MGI), one of the world’s largest money transfer
companies. Through this partnership, which will have an initial term of
two years, Ripple would become MoneyGram’s key partner for cross-border
payment and foreign exchange settlement using digital assets. In
conjunction with the partnership, Ripple has agreed to provide a capital
commitment to MoneyGram, which enables the company to draw up to $50
million in exchange for equity over a two-year period.
The partnership with Ripple will focus on the xRapid product, a solution
for on-demand liquidity, which reduces reliance on pre-funding by
enabling money to be sent from one currency and instantly settled in the
destination currency. It leverages XRP, the native digital asset of the
XRP Ledger, as a real-time bridge between the sending and receiving
currencies. XRP remains the most efficient digital asset for settlement
with transaction fees at just fractions of a penny, compared to other
digital asset fees of about $30 per transaction. Similarly, the average
transaction time for XRP is two to three seconds with other top digital
assets ranging from 15 minutes to an hour.
“As the payments industry evolves and matures, it’s imperative that we
continue to improve our platform and provide the most effective solution
to get funds from point A to point B,” said Alex Holmes, MoneyGram
Chairman and CEO. “Through Ripple’s xRapid product, we will have the
ability to instantly settle funds from US dollars to destination
currencies on a 24/7 basis, which has the potential to revolutionize our
operations and dramatically streamline our global liquidity management.”
MoneyGram operates globally in the $600 billion global remittance
market, serving millions of customers in more than 200 countries and
territories, supporting multiple currencies. Today, MoneyGram relies on
traditional foreign exchange markets to meet its settlement obligations,
which require advance purchases of most currencies. Through this
strategic partnership MoneyGram will be able to settle key currencies
and match the timing of funding with its settlement requirements
reducing costs, improving its balance sheet efficiency, and reducing
risk.
“This strategic partnership will enable MoneyGram to greatly improve its
operations and enable millions of people around the world to benefit
from its improved efficiency. This is a huge milestone in helping to
transform cross-border payments and I look forward to a long-term, very
strategic partnership between our companies,” said Brad Garlinghouse,
CEO of Ripple.
About Ripple
Ripple provides one frictionless experience to send money globally using
the power of blockchain. By joining Ripple’s growing, global network
(RippleNet), financial institutions can process their customers’
payments anywhere in the world instantly, reliably and cost-effectively.
Banks and payment providers can use the digital asset XRP to further
reduce their costs and access new markets. With offices in San
Francisco, New York, London, Mumbai, Singapore, Brazil and Sydney,
Ripple has more than 200 customers around the world.
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